Widespread cultivation of oil palm trees has been both an economic boon and an environmental disaster for tropical developing-world countries. New research points to a more sustainable path forward through engagement with small-scale producers.

Nearly ubiquitous in products ranging from cookies to cosmetics, palm oil represents a bedeviling double-edged sword. Widespread cultivation of oil palm trees has been both an economic boon and an environmental disaster for tropical developing-world countries, contributing to large-scale habitat loss, among other impacts. New Stanford-led research points the way to a middle ground of sustainable development through engagement with an often overlooked segment of the supply chain (read related overview and research brief).

"The oil palm sector is working to achieve zero-deforestation supply chains in response to consumer-driven and regulatory pressures, but they won’t be successful until we find effective ways to include small-scale producers in sustainability strategies,” said Elsa Ordway, lead author of a Jan. 10 Nature Communications paper that examines the role of proliferating informal oil palm mills in African deforestation. Ordway, a postdoctoral fellow at The Harvard University Center for the Environment, did the research while a graduate student in Stanford’s School of Earth, Energy & Environmental Sciences.

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An oil palm plantation in Cameroon (Image credit: Elsa Ordway)

Using remote sensing tools, Ordway and her colleagues mapped deforestation due to oil palm expansion in Southwest Cameroon, a top producing region in Africa’s third largest palm oil producing country (read about related Stanford research). Contrary to a widely publicized narrative of deforestation driven by industrial-scale expansion, the researchers found most oil palm expansion and associated deforestation occurred outside large, company-owned concessions, and that expansion and forest clearing by small-scale, non-industrial producers was more likely near low-yielding informal mills, scattered throughout the region. This is strong evidence that oil palm production gains in Cameroon are coming from extensification instead of intensification.

Possible solutions for reversing the extensification trend include improving crop and processing yields by using more high-yielding seed types, replanting old plantations, and upgrading and mechanizing milling technologies, among other approaches. To prevent intensification efforts from inciting further deforestation, they will need to be accompanied by complementary natural resource policies that include sustainability incentives for smallholders.

In Indonesia, where a large percentage of the world’s oil palm-related forest clearing has occurred, a similar focus on independent, smallholder producers could yield major benefits for both poverty alleviation and environmental conservation, according to a Jan. 4 Ambio study led by Rosamond Naylor, the William Wrigley Professor in the School of Earth, Energy & Environmental Sciences and a senior fellow at the Stanford Woods Institute for the Environment and the Freeman Spogli Institute for International Studies(Naylor coauthored the Cameroon study led by Ordway).

Using field surveys and government data, Naylor and her colleagues analyzed the role of small producers in economic development and environmental damage through land clearing. Their research focused on how changes in legal instruments and government policies during the past two decades, including the abandonment of revenue-sharing agreements between district and central governments and conflicting land title authority among local, regional and central authorities, have fueled rapid oil palm growth and forest clearing in Indonesia.

They found that Indonesia’s shift toward decentralized governance since the end of the Suharto dictatorship in 1998 has simultaneously encouraged economic development through the expansion of smallholder oil palm producers (by far the fastest growing subsector of the industry since decentralization began), reduced rural poverty, and driven ecologically destructive practices such as oil palm encroachment into more than 80 percent of the country’s Tesso Nilo National Park.

A worker in East Kalimantan, Indonesia, loads palm fruit for transport to a factory that will process it into palm oil (Image credit: Joann de Zegher)

A research team led by FSE director Rosamond Naylor has won a $400,000 multi-year grant to study how to create sustainable palm oil supply chains that promote economic growth and environmental sustainability in Indonesia and West Africa. 

Palm oil has become one of the world’s fastest growing and most valuable agricultural commodities. Global production of palm oil doubled in both volume and area each decade between 1970 and 2010, and is expected to double again by 2025. The windfall profits from this rapid expansion have come at a cost of tropical deforestation, biodiversity loss and rising greenhouse gas emissions, and in many cases the economic benefits have bypassed local smallholder farmers. 

Naylor and her team of Stanford faculty, scholars and students will undertake the three-year project with funding from the Stanford Global Development and Poverty Initiative (GDP), launched in Spring 2014. GDP aims to transform Stanford’s capacity to speak to the challenges of poverty and development. This year, GDP awarded more than $2 million to 13 faculty research teams from across the university. 

The new project marks the first venture that connects Stanford’s expertise in sustainability with the Graduate School of Business’ experience in value chain innovations. The team will conduct an evaluation of value chain opportunities for sustainable palm oil production, build corporate partnerships to improve smallholder incomes, and engage in policy advising. 

GDP is a joint initiative of the Stanford Institute for Innovation in Developing Economies (SEED) and the Freeman Spogli Institute for International Studies (FSI). SEED is housed within the Stanford Graduate School of Business. 

Rosamond Naylor is William Wrigley Professor of Earth System Science and Senior Fellow at the Stanford Woods Institute for the Environment and at FSI.

Hunger touches the lives of people throughout the world, from the affluent Bay Area to the most impoverished regions of rural Africa. Food security – the availability of plentiful, nutritious, and affordable food – is a pressing issue for rich and poor countries alike as the world population moves toward 9 billion by mid-century.

In her new book The Evolving Sphere of Food Security (Oxford University Press, August), Professor Rosamond Naylor takes a holistic approach to the question of how to feed the world. Naylor, a professor of environmental earth system science and director of the Center on Food Security and the Environment (FSE), convened 18 colleagues from across Stanford’s diverse disciplines to shed light on the interdependent issues that affect global food security.

Throughout its 14 chapters, and a foreword by former United Nations Secretary-General Kofi Annan, the book takes up two important questions: How does the challenge of achieving food security change as countries develop economically? And how do food and agriculture policies in one country affect nutrition, food access, natural resources and national security in other countries?

Collaboration across disciplines

Naylor, who edited the volume and co-authored several chapters, explained that The Evolving Sphere of Food Security is the first book of its kind to engage faculty and scholars from across Stanford’s campus on issues of global hunger.

Professor Rosamond Naylor

“This book grew out of a recognition by Stanford scholars that food security is tied to security of many other kinds,” said Naylor, who is also William Wrigley Senior Fellow at the Freeman Spogli Institute for International Studies and the Stanford Woods Institute for the Environment. “Food security has clear connections with energy, water, health, the environment and national security, and you can’t tackle just one of those pieces.”

Stanford has a long history of fostering cross-disciplinary work on global issues. It is in this spirit that the idea for the book was born, Naylor said. The book weaves together the expertise of authors from the fields of medicine, political science, engineering, law, economics and climate science.

“Stanford was the ideal place for this project. A book like this exemplifies how collaborative, interdisciplinary research can be greater than the sum of its parts,” Naylor said. “We have painted a much more inclusive picture of food security than if we had approached these questions from only one discipline.”

Rooted in field research

Another unique feature of the book is that each author’s insights are shaped by years of hands-on research and policymaking experience around the world.

Several authors, for example, have been instrumental in shaping U.S. and global food policy for decades. Walter Falcon, professor emeritus of economics and the deputy director of FSE, traces his career as an agricultural economics advisor to the Indonesian government, where he witnessed the country’s dramatic improvements in combating hunger and poverty since the 1960s.

Political science professor Stephen Stedman recounts his experience as a security policy advisor to the United Nations during the 2000s. Recognizing that food insecurity can exacerbate civil conflict, weaken governments and threaten international stability, Stedman worked to integrate food security into traditional security agendas.

Other authors have spent many years working in East Asia, Africa, South America, the Middle East and Europe. As a whole, said Naylor, the team has conducted well over a hundred years’ worth of field research all over the world.

Challenges evolve as countries develop

A recurring theme throughout the book – also reflected in its title – is the evolving nature of the food security challenges countries face as they move through stages of economic growth. At low levels of development, countries struggle to meet people’s basic needs. For example, Naylor’s chapter on health, co-authored with Eran Bendavid (medicine), Jenna Davis and Amy Pickering (civil and environmental engineering), describes a recent study showing that poor nutrition and rampant disease in rural Kenya is closely tied to contaminated, untreated drinking water. Addressing these essential health and sanitation issues is a key first step toward food security for the poorest countries.

As nations rise above the bottom rungs of development, they encounter new challenges. Scott Rozelle, director of the Rural Education Action Program, warns that middle income countries like China now face a “second food security crisis” of widespread micronutrient deficiency. Recent rapid economic and agricultural advancements have largely solved the problem of supplying sufficient calories. But this progress masks what Rozelle describes as “hidden hunger,” or a lack of vitamins and minerals that impedes kids’ school performance and could slow China’s long-term growth. Even in rich countries like the U.S., said Naylor, malnutrition can be a drag on educational and economic performance.

Developed countries face other unique tradeoffs in the use of resources for food production. In his chapter on water institutions, Buzz Thompson, professor of law and co-director of the Woods Institute, explains that conflicts over water increase between smallholder and industrial users as countries develop. Eric Lambin, professor of environmental earth system science, and Ximena Rueda, research associate in earth sciences, offer the paradox that as countries grow wealthier, changing patterns of agricultural land use may actually worsen food security by fueling the spread of obesity and diabetes.

At its core, said Naylor, The Evolving Sphere of Food Security is about more than economic and policy trends. “The book puts a human face to food security, because hunger is an intensely human experience,” she said. “This book tells an integrated story about people’s lives, and how they are shaped by resource use and the policy process around global food security.”

Indonesia’s rainforests are among the world’s most extensive and biologically diverse environments. They are also among the most threatened. An increasing population and growing economy have led to rapid development. Logging, mining, colonization, and subsistence activities have all contributed to deforestation.

But the recent and booming expansion of palm oil plantations could cause the most harm to the rainforests, and is generating considerable concern and debate among industry leaders, environmental campaigners and scholars.

Joanne Gaskell in Sumatra, Indonesia.

Joanne Gaskell has dedicated her graduate studies to better understanding the tradeoffs and demand side of this dilemma. The doctoral candidate and researcher for the Center on Food Security and the Environment recently defended her thesis before an audience of advisers, friends, and fellow students from Stanford’s Emmett Interdisciplinary Program in Environment and Resources (E-IPER).

“You need to understand the economics and politics of palm oil demand if you want to understand the regional dynamics of oil production and associated environmental impacts,” Gaskell said. “From a conservation perspective, this is as important as understanding supply since demand patterns affect the incentives facing producers.”

In the past 25 years, palm oil has become the world’s leading source of vegetable oil. Indonesia is currently the world’s top palm oil producer. Since the 1980s total land area planted to palm oil has increased by over 2,100 percent growing to 4.6 million hectares – the equivalent of six Yosemite National Parks. Plantation growth has predominately occurred on deforested native rainforest with major implications for global carbon emissions and biodiversity.

And Gaskell projects the demand for palm oil for food will double by 2035, requiring more than 8 million new hectares for production. Plantation expansion has already begun in Kalimantan and Papua, and Indonesian companies are now looking beyond Indonesia for new investment opportunities. Just as palm oil production spread from Malaysia to Indonesia to escape rising land and labor costs, palm oil production is now spreading to parts of Africa, where the crop is native, and Latin America.

Demand for palm oil is quickly rising in Asian markets – notably India and China – where it is used for cooking and industrial processes. Indonesia has the highest level of per capita palm oil consumption, resulting not just from population and income growth, but also from government policies that promoted the use of palm oil instead of coconut cooking oil.

“Taste preferences and investment more than international prices have driven palm oil demand in Indonesia,” Gaskell said.

Biodiesel production and speculation have also contributed to the rapid expansion of palm oil plantations, but to a lesser extent. Gaskell said the success of palm-based biodiesel hinges on remaining cheaper than petroleum diesel and whether governments subsidize the industry, as the United States has done with corn and soybean farmers.

Interest in palm oil as a cleaner burning fuel is already waning in Europe and the United States. The short-term carbon costs of deforesting and preparing land, fertilizing and managing the crops, then processing and transporting them outweigh the benefits. This is particularly true when palm oil plantations are grown on peat soils that release potent methane gas when drained for growing palm oil.

Palm oil seedlings ready for planting. Photo credit: Wakx/flikr

Growing plantations on ‘degraded land’, land that had been previously converted for other purposes, such as logging, is a much more favorable option over forest expansion. In theory, there is an abundance of degraded areas that can be profitably converted into palm oil plantations. But there are hurdles: The areas are not necessarily contiguous, making it difficult to organize a plantation, and ownership rights in these areas are often contested.

Palm oil’s considerable productivity and profitability offers wealth and development where help is most needed. Half of Indonesia’s population lives on less than $2 a day. But along with the negative ecological impacts, palm oil production increases competition for land and could exacerbate inequalities between the rich and the poor.

Gaskell believes sustainable expansion strategies are possible, and says smaller mills and different processing technologies are needed so production is affordable in scaled-down, more distributed systems.

Palm oil plantation in Cigudeg, Indonesia. Photo credit:  Achmad Rabin Taim/flickr

Her work is feeding an international conversation about palm oil production. The Roundtable on Sustainable Palm Oil (RSPO), an international organization of producers, distributors, conservationists and other stakeholders, has promoted better ways of managing palm oil production and encouraging transparency and dialogue among corporate players, governments, and NGOs.

“We need to protect the most ecologically valuable landscapes from agricultural production and we need to make sure that, in areas where palm oil agriculture occurs, there are ecological management strategies in place such as riparian buffers, wildlife corridors, and treatment systems for mill effluent,” she said. “From a food security perspective, small palm oil producers, who might be giving up rice production or the production of other food staples, need strategies to minimize the economic risk associated with fluctuating global palm oil prices.”